StemCells Grants License to StemCell Technologies, Inc., a Canadian Company, for Research Use of Murine Neural Stem Cells

PALO ALTO, Calif., September 17, 2003 – StemCells, Inc. (Nasdaq: STEM) announced today that it has entered into a long-term license agreement with StemCell Technologies, Inc. ("STI"), a Canadian corporation with its head office in Vancouver, BC and additional offices in the USA, France and England. The license agreement authorizes STI to manufacture, use and sell certain proprietary mouse and rat neural stem cells and culture media for all mammalian neural stem cells, for educational and research purposes worldwide. STI will market some of these research products under their established NeuroCult™ brand name.

"We are very pleased that STI has agreed to take a license for supplying these materials to the research market," said Martin McGlynn, President and CEO of StemCells. "One of the benefits of our extensive patent portfolio is that we are in a position to encourage research on neural stem cells. I believe that this license will help researchers obtain legitimate access to murine stem cells and associated materials. As I have said before, the more we can learn about the ways in which neural stem cells can be used to improve human health, the more potential there is to use stem cells for therapeutic purposes."

"StemCell Technologies is delighted to receive this license from StemCells, Inc", said Dr. Allen Eaves, President and CEO of STI. "Neural stem cell research is an exciting area of study that holds tremendous promise. We firmly believe that our company can make a significant contribution in helping to move this field forward through the timely development and delivery of high quality standardized research tools, as we have done previously for the hematopoietic stem cell field".

StemCells is the owner or exclusive licensee of 38 issued US patents of which the majority are in the neural stem cell field, as well as numerous issued and pending foreign counterparts. The license covers the research use of cells under ten of the US patents and their foreign counterparts.

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About StemCell Technologies, Inc.
StemCell Technologies, Inc. is a privately owned, market-driven biotechnology company located in Vancouver, British Columbia. The company provides highly specialized cell culture media and cell separation products that support and enable medical research in areas such as cancer, hematology, immunology, cell transplantation, gene therapy, and developmental biology. StemCell Technologies' lead product, MethoCult™, is the industry standard media for hematopoietic progenitor assays. The company also offers training courses, coordinates a global proficiency testing program for hematopoietic progenitor assays, and provides contract assay services to the biotechnology and pharmaceutical industry.

Apart from statements of historical facts, the text of this press release constitutes forward-looking statements regarding, among other things, the future business operations of StemCells, Inc. ("the Company"). The forward-looking statements speak only as of the date of this news release. StemCells does not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Such statements reflect management's current views and are based on certain assumptions that may or may not ultimately prove valid. The Company's actual results may vary materially from those contemplated in the forward-looking statements due to risks and uncertainties to which the Company is subject, including uncertainties regarding the Company's ability to obtain the capital resources needed to continue its current research and development operations and to conduct the research, preclinical development and clinical trials necessary for regulatory approvals; the fact that the Company's stem cell technology is at the pre-clinical stage and has not yet led to the development of any proposed product; the uncertainty whether results comparable to those in murine preclinical work will be obtainable in humans; the uncertainty whether the Company will achieve revenues from product sales or become profitable; uncertainties regarding the Company's obligations in regard to its former encapsulated cell therapy facilities in Rhode Island; and other factors that are described in Exhibit 99 to the Company's Annual Report on Form 10-K entitled "Cautionary Factors Relevant to Forward-Looking Statements."

Corporate Contact:

StemCells, Inc.
Martin McGlynn, President & CEO
650-475-3100, ext 108

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